5 Tips for Living on One Income

We live on one income. A teacher’s salary. That’s the one income we are guaranteed each month. We do have some extra money that we earn on the side from Ryan’s reffing job and my Etsy shop, but it varies and comes second to our family.

I purposefully used the word “Thrive” in the picture above because I wanted to focus on the positives of budgeting and not just getting by. Sometimes in life we do have to live on bare minimum to make ends meet, but I think we all want to thrive at a certain point. Thriving for us financially is saving for retirement and college, never going in debt, tithing plus more, and enjoying some things like vacations.

Living on one income sounded a lot easier before it came to fruition. We strategically planned for this because we knew before we got married that I would stay home when we had kids. I was a teacher as well. It’s no secret what teachers make, so we choose to live by these 5 things to help us grow financially while living on one income.

1. We bought a house we could afford
It all started with this! We had two goals when buying a house – To get a 15 year note and pay extra on top of that, ideally double the mortgage. So we needed to make sure we could afford the monthly payments (and some). I’ve said this before, but a good rule of thumb is yourmortgage should NOT be more than twice your household’s total annual income. Not the value of the house, just the amount you borrow from the bank. This is not a science, but a recommendation. This comes from the book The Millionaire Next Door. I talk more about it in this post where I share 3 tips to consider before purchasing a house. Our mortgage was around $970 (plus $360 property tax), and Ryan actually paid DOUBLE the mortgage for an entire year before we got married and I brought in any income. One teacher salary and we paid $2300 a month towards the house. This was well over half our household income. It cut our time in half of paying off our 15 year note. Once I got a job, we threw a third payment towards it, then a fourth, and fifth, until we paid it off 33 months after purchasing it. This was all possible because we bought a house we could afford. This freed up our ability to live off one income once we had kids. Regardless if your house is paid off or not, it’s still important to buy a house you can afford. It’s amazing how much more we would have paid for our house on a 30 year note. Even worse, the hundreds of thousands we would have lost in investments for retirement.

2. We buy our cars in cash
When you’re living on one income, you have to get your monthly expenses LOW. Having a car payment can be a huge expense. The week after we were married, Ryan paid off the remaining $8,000 I owed on my car. His was already paid off since he bought it in cash. We have spent the last few years (intentionally for the last year) saving for a new car so we can pay cash for it. We’re always saving for big purchases with any extra money we make, which makes it easier to purchase big things when we need them. Cars depreciate fast, so it’s definitely something you don’t want to finance if you can. Read this post to see how taking on monthly car payments can cost you millions of dollars.

3. We never go into debt
Never ever would we purchase items on a credit card if we could not afford them. If we make X, we spend less than X. It’s just not an option. We use a credit card for our purchases and pay them off each month. We do this so we can earn extra money on rewards. We’ll often earn $1,000 a year and use that towards a vacation. Credit cards CAN be good if paid off each month. If it’s tempting to go over your budget with a credit card, don’t use one. One thing that helps us stay out of debt is…

4. We have a savings account (emergency fund)
Unexpected things come up. They just do. Kids get sick/hurt, car accidents happen, big appliances break, you lose your job, etc. Having a savings account keeps many families out of debt. We always try to under budget for small unexpected things, but if something major occurs, we can pull from our savings account. Just make sure to pay it back. It’s recommended you have a $1,000 emergency fund and 3-6 months salary saved up in the case of a job loss.

5. We keep our expenses low – Budget
Budgeting is the key to living on one income (any income for that matter). We know where every dollar goes in our budget. We track each expense every month. Having few and small expenses is important if money is tight. It’s not fun, but cutting out things like dining out (just some…you know how I love eating out), entertainment, house updates, and more is important when you’re trying to save money. We didn’t have cable for the first 7 years of our marriage and I dyed my hair brown (my natural color) right after our wedding until we had enough money to dye it back blonde. I suggest dissecting your budget and highlighting the categories that are non-negotiable (house) vs. needs vs. wants and see how you can lower each one. I would consider Groceries a “need” but something that you can lower if needed. When we budget, we don’t have a zero balance budget (although sometimes that’s necessary), but always under budget so in case we need something we didn’t budget for, we don’t have to dip into another account.

I always feel the need to express God’s guidance and blessings and how it has helped us make the decisions we have. If this list seems overwhelming or unattainable all at once, just start with #5. Track every expense and find ways to cut expenses.

Amen! I'm so frustrated that more people don't understand how to handle their money. I think its incredibly amazing that you are honest and put all this out there. You are a beautiful example of "THRIVING."

I'm a new follower and really enjoy your blog. My husband and I don't have any major debt (just house and a little left on cars), but I wish we would have saved more before we had kids. We took too many vacations and went out to nice restaurants way too often. These tips inspire me to do better with saving.

Thank you so much for posting this! You are such an inspiration. I love reminders that living within our means IS the right thing to do even when it isn't fun. How do you deal with overcoming the desire to buy things you cannot afford? For example, we have a lot of updates that I would like to do to our house, but we have student loan debt to pay off. I feel sad that we cannot make our house look the way we want it to, but I know it wouldn't be smart to put money towards renovations and decorating when we have interest building up on our loans. 🙁

Good question Jen! When it comes to getting the things we want but can’t afford, we just save up. Or to be honest, WAIT. I hate it, but sometimes it’s the only way. I am JUST now starting to do things to our house with the extra income I make with Etsy. We’ve lived here 8.5 years and we are just starting to redecorate or renovate. Nothing major, but we decided to stay in this house (even though we want to move), so it’s cheaper for us to spruce this up than move. You are definitely right about the smarter choice being paying off your loans. You’ll get there I promise and you’ll be happy you made that choice.

Great list! I'm a sahm (former teacher) and my husband currently teaches 8th grade, so I relate a lot to this post. We only have the mortgage on our house (amazing that you have yours paid off!) but are doing our best to save and live well within our means so I can continue staying home. Yours is a great reminder that if you are determined, you can make it work to stay at home!

You must have had a decent paying teacher job. My husband is looking for a job in the US to be able to move back, but most only pay between $30-40K, and his field requires a Master's degree, which he has. Finding a house to buy with that income will be tough.

Texas teachers get paid fairly well relative to others (I think). Starting salary in the city I used to work in is now $49,000, but that is a HUGE raise that JUST happened this last year. When I started in 2008 it was $38,000. And the city my husband teaches in is comparable, but he's been working for over 9 years now so he's got a slight raise over the years (enough to keep up with inflation at least). When we bought our house it was $150,000…it's a great house! We make less than most of our neighbors/friends, but we're extremely intentional about our finances. The city we live in has boomed over the years so our house has appreciated really well, but now when we look to purchase a new house, it's definitely harder to find something we can afford and pay off in 10-15 years since we'd have to take on a mortgage again. Good luck finding a job here…and a house!

Thank for for the inspiration! We just had our first child in March and I went back to teaching in August. I would love to stay home and am trying to convince my husband we can. I have about $11,000 left on my student loan but will get $5,000 taken off this year due to teaching in a low income district. He makes around $55,000 a year and we pay extra on our mortgage each month. Both cars paid off. Thank you for saying it can be done!

Congratulations on the baby. That’s about what my hubby makes teaching (but that’s are only steady income). We both have part time jobs that also bring in money. Depending on where you live, you really could stay home with all that you guys have paid off! That is amazing you pay extra on your mortgage. Keep doing it! 🙂

I read this and feel frustrated! I feel this way because you were mentioning putting down $2,300 a month for your mortgage, I have a MAT and eights years teaching experience (currently teach 11th grade English) and I (net) bring in $2,400 a month…that's only $100 more than you were paying for mortgage…with rent at $850.00, and car insurance, student loans, electric bill etc., how do I save and maintain sanity by allowing myself to go out for dinner and do little things for pleasure? I feel like I'm constantly drowning in lack of money and it blows my mind because I owe 34k in student loans to be considered "highly qualified" yet a teacher with a Masters only makes $100 more a paycheck than one with a Bachelors. I live in Pinellas County, Florida.

Oh wow, I didn’t know Florida teachers were paid that. Teacher pay here in Tx where I live is about 3100 a month (early on with no masters). My mom has her masters too and I think it’s amazing but definitely not a financial benefit unless you go into administration. I can’t believe states don’t pay those with masters more. I wanted to get my masters but it was a really bad investment (never would have made what I spent on the education). To be honest the only thing I could suggest is finding a way to bring in extra income (my hubby did this when we were paying extra on house both when I was and was not working). I won’t ever go back into the teaching field because I have a family now and the time I value away from them now is ginormous compared to what they’re willing to pay me. I told my hubby I’d go back if they paid me $10,000 a month for the work required.

It is tough living on a limited income and constantly having to worry about money. It is always nice to know there are people like you to help give advise on how to handle money for those who need it. Staying out of debt is an especially good tip, credit card companies make it so tempting to buy more.

Where do you live Cara? Yes, Tx housing is pretty great I think. Houses where I live range from $200,000-500,000 (the average) for 2000-4000 sq. feet. Definitely why I would never live in California. I honestly don’t know how people afford to live there.

Great post! My husband is a teacher too and our budget runs off of his income. I saw your post and had to read it. 🙂

We are waitlisted to adopt our first child and hope it happens this year. Since we are debt free and live on a budget, I will be staying home full time when the baby comes. God’s blessed us and we’ve worked hard at our finances! It’s so worth it!

Wow that is awesome Kelly! It’s hard to live off one teacher income, but staying home with your soon to be little one will be worth it anyway! I hope your adoption happens quickly and you’ll get to hold your child soon!

I love to read your blog and your financial tips are my favorite! Spending money on groceries is my financial downfall! We waste so much food (that’s embarrassing for me to admit and it literally hurts for me to type that). I tend to stockpile certain non perishable items when they are on sale. That leads to my question- Do you stockpile at all, other than meat? Or just stick to you budget no matter what? I live in MI so it is necessary to keep some back up items / food in stock due to inclement weather. Anything can happen here in the winter!

Thank you Mary! Grocery budget is hard for a lot of people (including myself) and not wasting food too. I’m constantly working on that. As far as stockpiling goes, we do keep meat like you said for the price deal. Other than that we stock up on some things at Costco when they’re on sale like toilet paper, dryer sheets, laundry detergent, etc…most non-food items. We also buy frozen things in bulk when on sale since we have a deep freezer, but not a lot of pantry items because our pantry is pretty small. Sometimes if I’m making a meal, I’ll split it into 2 meals and freeze one. I’m not huge on freezer meals (I think they taste different), but it’s great for emergency backups, especially in places where you live where weather can keep you indoors for a long time. Hope that helps a little. Bottom line, we stockpile on price alone (whenever a good deal).